Bitcoin Price Bloodbath: $50,000 on the Brink if this Critical Level Crumbles

by

As a seasoned crypto investor with a few years under my belt, I’ve seen my fair share of market volatility. And right now, the situation feels precarious as Bitcoin and altcoins face a potential correction. The recent price drop to below $65,000 is a stark reminder of the risks involved in this asset class.

This week, Bitcoin‘s price is teetering on the edge of instability as the potential correction from its peak at $70,000 approaches a significant support level around $60,000. As market volatility increases, irrational selling driven by fear may exacerbate the situation, potentially causing a steep decline in Bitcoin’s price and leading other cryptocurrencies to follow suit in a mass sell-off.

The biggest cryptocurrency could dip down to $50,000 before the anticipated market upturn that may define the bullish trend in the latter part of 2024 takes place.

The values of most alternative cryptocurrencies have experienced significant decreases, with Ethereum barely clinging to its support at a price of around $3,500. Solana could finish the day below the $130 mark if the bulls are unable to reverse the current downtrend before then.

Based on information from CoinGecko, the overall market capitalization has decreased by 3.3% to reach approximately $2.45 trillion. Bitcoin presently holds a dominance of 51.2%, while Ethereum follows closely with a 17.4% share.

Bitcoin Price Nosedives, Crypto Fear And Greed Index Hits 63

As an analyst, I’ve observed a noticeable decline in the market’s exhilaration that was so evident in May. Bitcoin experienced remarkable growth during this period, surging from a support level of $56,000 to nearly reaching its all-time high at around $72,000. However, just as suddenly as it had gained momentum, the upward trend came to a halt.

With the green light given for Ethereum ETFs in the United States, sentiment soared, pushing the fear and greed index to hit 74. This surge signifies a more robust buying stance, sparking Fear of Missing Out (FOMO) among investors and resulting in an exuberant market atmosphere.

Despite a disappointing past week for the cryptocurrency market, its poor performance can be linked to the Federal Reserve’s firm resistance to making interest rate cuts, despite decreasing inflationary pressures.

Bitcoin Price Bloodbath: $50,000 on the Brink if this Critical Level Crumbles

Miners are reportedly giving up and shutting down operations, leading to the sale of their Bitcoin stashes. This development comes after the Bitcoin reward per mined block was reduced from 6.25 to 3.125 BTC in April through a process called halving.

Bitcoin is facing a challenging outlook as selling pressure increases, pessimistic attitudes prevail, and crucial support levels fail to hold, raising concerns for the cryptocurrency’s trajectory over the coming weekend.

Bitcoin Price Analysis Growing Uncertainty

The deteriorating state of Bitcoin’s price suggests that the Money Flow Index (MFI), which measures the inflow and outflow of funds in the Bitcoin market, is declining rapidly towards oversold territory. This signifies that traders are preferring to sell Bitcoin rather than buy it using other currencies or digital assets, resulting in significant resistance.

Bitcoin Price Bloodbath: $50,000 on the Brink if this Critical Level Crumbles

In simpler terms, two “death cross” indicators have appeared on Bitcoin’s four-hour chart, increasing the likelihood of a bearish trend. The black horizontal line marks an essential level of support. If Bitcoin fails to hold this level, the price could drop further, potentially reaching $60,000.

According to the analysis of the Fibonacci sequence on the graph, there’s a good possibility for bulls to regain control and push the price up to around $62,000 – this probability is indicated by the 0.618 ratio.

Based on the previous breaks of support levels at $62,000, $60,000, and $58,000 in April and May, it may be wise to anticipate a protracted downtrend towards $56,000, although a potential drop to $50,000 cannot be entirely disregarded.

Despite the current uncertainty surrounding Bitcoin’s price, there’s a possibility that its bulls may not have reached their final destination yet. The Ethereum ETF is expected to begin trading on July 2, which could bring comfort to investors and potentially ignite a robust surge toward $70,000. A leap above the previous peak of approximately $73,000 might be the catalyst Bitcoin requires to instigate fear of missing out (FOMO) among investors, leading to an anticipated rally reaching $100,000 by 2024.

Read More

2024-06-21 16:42